This is an affordability gauge, not a measure of the price of a typical home. It tracks house prices relative to household income: when it rises, earnings buy less housing, making it harder for prospective buyers to save a sufficient deposit or qualify for a mortgage on the same kind of property.
The latest move also breaks with a recent plateau. The index stood at 148.2 in 2022, 147.4 in 2023 and 147.3 in 2024 before reaching 166.7. Since 2016, Portugal’s ratio has risen 60.9%, compared with 11.4% for the OECD benchmark.
The OECD’s economic survey of Portugal attributes the 2025 rise to strong domestic and foreign demand colliding with a chronic shortage. It says construction has remained sluggish amid long-term underinvestment, labour shortages, rising costs and weakened capacity since the debt crisis.
That does not mean every household’s immediate housing bill worsened at the same pace. Portugal’s housing cost overburden rate, which captures people in households devoting an unusually large share of disposable income to housing, was unchanged at 12.4% in 2025. The two measures answer different questions: the flat overburden rate describes current household costs, while the price-to-income record is a sharper warning about access to home ownership.